State Report: Speaker Fox’s Battle, Tax Amnesty & the 38 Studios Debacle

This week, the State House Roundup takes a look at some of the positive news stories occurring locally. Not only did dredging finally begin at Quonset Point, but also Providence was named one of the most underrated cities in the nation. Additionally, the state was able to recoup $7.4 million in back taxes through its tax Amnesty program, as well as take in $650,000 in the second scheduled 38 Studios auction.

 

Lastly, since it's election season, we examine an evolving story regarding a negative radio attack ad waged against House Speaker Gordon Fox.

For the second week in a row, a court-supervised auction was held selling items formerly belonging to the failed video game company 38 Studios. Unlike last Tuesday’s auction, this week’s public sale took place at the company’s former headquarters on Empire Street in downtown Providence. The event attracted 1,000 registered bidders, half of which were online, and brought in about $650,000.

 

The items once owned by Curt Schilling’s company were separated into 2,100 lots for the sale. The event managed to sell about 95 percent of the lots. The impressive auction was an all day event starting at 10:30 a.m. and stretching until 10 p.m.

 

The previous 38 Studios auction, which was hosted in Maryland, raised $180,000, not including expenses. Despite the money brought in by both auctions, the real monetary value lies in 38 Studios intellectual property. According to Wedbush Securities analyst Michael Pachter, the company’s IP is worth about $20 million.

 

Both auctions are part of the state’s attempt to raise funds to pay investors that purchased EDC-backed bonds, which financed 38 Studios move from Massachusetts to Rhode Island. The company filed for bankruptcy earlier this year, leaving taxpayers on the hook for a $75 million loan guarantee.

The long-awaited project to dredge the Port of Davisville at Quonset Point officially began on Thursday. The $7.5 million undertaking is intended to make it easier for ships to access the port by guaranteeing a depth of 32 feet below the low waterline. The project marks the first time the Port of Davisville has been dredged since the port was constructed in the 1940s.

 

The multi-million dollar project is being funded by revenue from the port, which is one of the country’s largest handlers of imported cars. Approximately 150,000 vehicles are brought the Quonset seaport annually. The new 32-foot depth will allow large car carriers better access at the port.

 

Roughly $30 million worth of improvements have been made to the Port of Davisville over the last four years, according to Steven King, managing director of the Quonset Development Corp.

 

Once home of the Naval Air Station, a large U.S. Navy base, Quonset Point is now used for industrial purposes. It is currently home to 168 companies that provide roughly 8,800 jobs.

The state’s tax amnesty program has brought in almost $7.4 million in payments, according to the state Division of Taxation. The agency has received 2,792 applications since the amnesty program began Sept. 2.

 

The state’s amnesty program waves penalties for anyone who submits past-due returns with their owed taxes. Additionally, interest on the owed amount is decreased by 25 percent and the state agrees not to pursue any legal action against taxpayers.

 

Anyone interested in participating in the program has until Nov. 15. Not surprisingly, Tax Administrator David Sullivan says he expects most taxpayers who owe back taxes to wait until the end of the program.

 

Rhode Island’s tax amnesty program includes corporate income tax, estate tax, fiduciary income tax, personal income tax, sales tax, use tax, cigarette and tobacco products taxes and employer taxes. For more information call (401) 574-8650, or e-mail [email protected].

Although some of its inhabitants may take Providence for granted, the state’s capital city has just earned a spot on a list of the 10 most incredible and underrated cities. The list, which was complied by Residence Inn by Marriott, mainly applauds Providence for its diversity, history and charisma. The extended stay hotel chain described the Creative Capital as follows:

 

“In the last decade, Providence is one city that's truly been reborn. It may not be Venice, but you can enjoy a stunning gondola ride through the heart of downtown. With awesome special events, a blossoming dining selection, a diverse art scene and plenty of rich history, this is one charming city that you may end up staying in permanently.”

 

Providence was bested by just two cities: Portland, Oregon and Charleston, South Carolina. To its credit, Providence beat out countless major cities including Milwaukee, Louisville, Boulder, Baltimore, Astoria, Pittsburgh and Fort Worth.

 

Earlier this year, Providence’s WaterFire was named one of the top after dark spots in the world by the travel website Smarter Travel. WaterFire ranked 5 out of 10, beating out popular nighttime locations in Paris, Singapore and Puerto Rico.

Earlier this week it a Connecticut man named Harvey Adelberg made headlines for launching a radio attack ad against House Speaker Gordon Fox. The commercial began as an anonymous attack ad, but soon morphed into something much more serious when Adelberg filed an “independent expenditure” report amidst accusations from the Fox campaign that he had broken the law.

 

The ad, which debuted on WPRO on Wednesday, criticized Fox for the 38 Studios bankruptcy calling him the “architect of the 38 Studios debacle.”

 

“Now he’s running around saying he had nothing to do with it…or doesn’t know how it got through…Are you kidding me?” added the commercial’s voice-over.

 

Fox issued the following statement after becoming aware of the ad:

 

“I heard about it and I hear it’s sort of like nameless and faceless, there’s been no identifiers which I believe is contrary to the law that we passed last year. So I mean, it’s just unfortunately probably election season people just throwing mud and hoping it sticks rather than coming up with real solutions like we’re doing here today,” said Fox.

 

Speaker Fox’s statement prompted Adelberg to file an “independent expenditure” on Thursday in order to avoid possible legal ramifications. Adelberg received legal council from lawyer Erik Wallin, a former Republican candidate for attorney general. The 60-second was also amended to include the phrase “I’m Harvey Adelberg and I paid for and approved the content of this ad.”

 

The story continued to develop on Friday when the Fox accused his opponent Independent challenger Mark Binder of being associated with the attacks. Additionally, the Fox camp filed a complaint with the state Board of Elections citing that the ad violates Rhode Island General Law.

 

Speaker Fox will square off against Independent challenger Mark Binder on Nov. 6. Binder has denied any association with the ad.